According to the Finance Ministry's April Monthly Economic Review, India's services exports have become a vital component of the country's external economic resilience. In FY26, services exports grew by 7.9% year-on-year, surpassing $400 billion for the first time and reaching $418.3 billion. This growth reflects a structural shift in India's export profile, as the share of services in total exports rose to 48.6% from 47% in the previous fiscal year. The services sector generated a net surplus of $213.9 billion, which accounted for 64.2% of the total merchandise trade deficit of $119.3 billion in FY26. Despite the widening trade deficit, the strong performance of services exports has provided a stabilizing effect on the economy, mitigating vulnerabilities arising from global uncertainties and supply chain disruptions. The report emphasizes that while merchandise exports have struggled, the services sector, particularly in IT and business services, continues to thrive and support India's overall export growth.